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Note 4 - Securities

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 4: Securities

The amortized cost and estimated fair value of securities available for sale along with gross unrealized gains and losses as of the dates indicated are summarized as follows:

June 30, 2024		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
U.S. government agencies and corporations		$	353,018			$	-			$	44,205			$	308,813
States and political subdivisions			178,435				-				32,433				146,002
Mortgage-backed securities			149,839				27				6,120				143,746
Corporate debt securities			6,506				-				849				5,657
U.S. treasury			998				-				20				978
Total securities available for sale		$	688,796			$	27			$	83,627			$	605,196

December 31, 2023		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
U.S. government agencies and corporations		$	353,904			$	-			$	42,060			$	311,844
States and political subdivisions			179,507				-				29,614				149,893
Mortgage-backed securities			156,875				-				6,724				150,151
Corporate debt securities			6,504				-				754				5,750
U.S. treasury			996				-				33				963
Total securities available for sale		$	697,786			$	-			$	79,185			$	618,601

No allowance for credit loss on securities available for sale was recorded as of June 30, 2024 or December 31, 2023.

Accrued interest receivable on securities, included in accrued interest receivable on the Consolidated Balance Sheets, totaled $3,263 at June 30, 2024 and $3,281 at December 31, 2023.

The deferred tax asset for the net unrealized loss on securities available for sale was $17,556 as of June 30, 2024 and $16,629 as of December 31, 2023. The deferred tax asset is included in other assets on the Consolidated Balance Sheets.

The amortized cost and fair value of single maturity securities available for sale at June 30, 2024, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

		June 30, 2024
		Amortized Cost				Fair Value
Available for Sale:
Due in one year or less		$	20,010			$	19,618
Due after one year through five years			187,697				172,569
Due after five years through ten years			268,663				227,654
Due after ten years			212,426				185,355
Total securities available for sale		$	688,796			$	605,196

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that the individual securities have been in a continuous loss position, as of the dates indicated, follows.

June 30, 2024		Less Than 12 Months								12 Months or More
		Fair Value				Gross Unrealized Losses				Fair Value				Gross Unrealized Losses
U.S. government agencies and corporations		$	-			$	-			$	308,813			$	44,205
State and political subdivisions			882				120				145,120				32,313
Mortgage-backed securities			520				1				121,951				6,119
Corporate debt securities			-				-				5,657				849
U.S. treasury			-				-				978				20
Total temporarily impaired securities		$	1,402			$	121			$	582,519			$	83,506

December 31, 2023		Less Than 12 Months								12 Months or More
		Fair Value				Gross Unrealized Losses				Fair Value				Gross Unrealized Losses
U.S. government agencies and corporations		$	-			$	-			$	311,844			$	42,060
State and political subdivisions			884				1				148,763				29,613
Mortgage-backed securities			1,616				26				147,922				6,698
Corporate debt securities			-				-				5,750				754
U.S. treasury			-				-				963				33
Total temporarily impaired securities		$	2,500			$	27			$	615,242			$	79,158

The Company evaluates securities available for sale that are in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to the extent to which the fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2024, the Company had 566 securities with a fair value of $583,921 in an unrealized loss position. The Company reviews securities in an unrealized loss position to evaluate credit risk. The Company considers payment history, risk ratings from external parties, financial statements for municipal and corporate securities, public statements from issuers and other available credible published sources in evaluating credit risk. No credit risk was found and no ACL on securities available for sale was recorded as of June 30, 2024. The unrealized losses are attributed to noncredit-related factors, including changes in interest rates and other market conditions. The Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The contractual terms of the investments do not permit the issuers to settle the securities at a price less than the cost basis of the investments. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

Restricted Stock.

The Company holds restricted stock that is reported separately from available for sale securities. As a member of the Federal Reserve and the Federal Home Loan Bank of Atlanta (“FHLB”), NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital and a percentage of qualifying assets. The Company purchases stock from or sells stock back to the correspondents based on their calculations. The stock is held by member institutions only and is not actively traded.

Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling $503,383 at June 30, 2024. The Company’s management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at June 30, 2024, did not determine any impairment.

Realized Securities Gains and Losses

The Company initiated sale of FCB’s securities portfolio upon completion of the acquisition, and no gain or loss was recorded. During the first six months of 2023, the Company realized net securities losses of $3,332 on the sale of securities with an amortized cost basis of $46,850. The sales were part of the Company’s interest rate risk management strategy.

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The entire disclosure for investments in certain debt and equity securities.

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